Question 1

A system for evaluating subordinates' behavior by their ability to achieve specific goals is called:
A)An SOP
B)Performance appraisal
C)MBO
D)TQM
E)Clan control

Accepted Answer

Management by objectives (MBO)is a formal system of evaluating subordinates on their ability to achieve specific organizational goals or performance standards and to meet operating budgets.

Question 2

The workers of an organization perform the same activities in the same way over and over again,based on rules that managers have developed.We say that the behavior of these workers has been:
A)Compromised
B)Standardized
C)Maximized
D)Minimized
E)Simplified

Accepted Answer

When employees follow the rules that managers have developed,their behavior is standardized-actions are performed the same way time and time again-and the outcomes of their work are predictable.

Question 3

The times-covered ratio,which measures the degree to which managers use debt or equity to finance ongoing operations,is a type of financial ratio known as:
A)Current ratio
B)Liquidity ratio
C)Leverage ratio
D)Activity ratio
E)Profit ratio

Accepted Answer

Leverage ratios,such as the debt-to-assets ratio and the times-covered ratio,measure the degree to which managers use debt or equity to finance ongoing operations.

Question 4

All of the following are problems associated with direct supervision EXCEPT:
A)Expensive
B)Demotivation of subordinates
C)Not feasible for some jobs
D)Employees may feel scrutinized
E)Personal involvement with subordinates

Accepted Answer

A benefit of direct supervision is that it allows managers at all levels to become personally involved with their subordinates and allows them to mentor subordinates and develop their management skills.

Question 5

The use of direct supervision as a control mechanism:
A)Is the least expensive form of control
B)Can demotivate subordinates
C)Is feasible for complex jobs
D)Is preferred over output controls
E)Is preferred over behavior controls

Accepted Answer

Direct supervision can demotivate subordinates.

Question 6

A division manager is told to "maximize the sales of the division" and is then evaluated on the basis of the net sales generated by the division.This is an example of:
A)A profit budget approach
B)A revenue budget approach
C)An expense budget approach
D)A cash flow budget approach
E)A capital budget approach

Accepted Answer

Managers may be asked to maximize the revenues from the sales of goods and services produced (a revenue budget approach).

Question 7

Which types of financial ratios measure how well the managers of the organization are creating value from the organization's assets?
A)Leverage ratios
B)Liquidity ratios
C)Profit ratios
D)Current ratios
E)Activity ratios

Accepted Answer

Activity ratios show how well managers are creating value from organizational assets.

Question 8

What is the reason why so many managers use financial measures to assess the efficiency and effectiveness of their organizations?
A)Objectivity
B)Subjectivity
C)Feasibility
D)Ease of use
E)Creativity

Accepted Answer

The objectivity of financial measures of performance is the reason why so many managers use them to assess the efficiency and effectiveness of their organizations.

Question 9

Control by means of a comprehensive system of rules and standard operating procedures (SOPs)that shapes and regulates the behavior of divisions,functions,and individuals is known as:
A)A bureaucratic control system
B)Management by objective
C)Output control
D)Clan control
E)Market control

Accepted Answer

Bureaucratic control is control by means of a comprehensive system of rules and standard operating procedures (SOPs)that shapes and regulates the behavior of divisions,functions,and individuals.

Question 10

As the regional manager,Ted's performance is evaluated on the basis of the difference between the sales revenues generated by his region and the cost of making those goods and services.Ted is being evaluated using:
A)A profit budget approach
B)A revenue budget approach
C)A cash flow budget approach
D)A cost budget approach
E)An expense budget approach

Accepted Answer

Managers may be evaluated on the difference between the revenues generated by the sales of goods and services and the budgeted cost of making those goods and services (a profit budget approach).

Question 11

What is the most immediate and potent form of behavior control?
A)SOPs
B)An MBO system
C)Rules
D)Direct supervision
E)Return on investment

Accepted Answer

The most immediate and potent form of behavior control is direct supervision.

Question 12

A division manager is evaluated based on his division's revenues less the budgeted cost of his division.This is an example of:
A)A cash flow budget approach
B)A capital budget approach
C)A revenue budget approach
D)An expense budget approach
E)A profit budget approach

Accepted Answer

Managers may be evaluated on the difference between the revenues generated by the sales of goods and services and the budgeted cost of making those goods and services (a profit budget approach).

Question 13

Which type of financial ratio is computed by dividing the organization's current assets by its current liabilities?
A)Inventory turnover ratio
B)Days sales outstanding ratio
C)Profit ratio
D)Current ratio
E)Debt-to-assets ratio

Accepted Answer

The current ratio (current assets divided by current liabilities)tells managers whether they have the resources available to meet the claims of short-term creditors.

Question 14

In MBO:
A)Subordinates set goals for themselves
B)Managers set goals for subordinates
C)Subordinates set goals for managers
D)Managers and subordinates set goals together
E)Managers and subordinates goals are unrelated

Accepted Answer

Managers at every level sit down with each of the subordinate managers who report directly to them,and together they determine appropriate and feasible goals for the subordinate.

Question 15

Inventory turnover is a type of:
A)Leverage ratios
B)Liquidity ratios
C)Profit ratios
D)Activity ratios
E)Quick ratios

Accepted Answer

Activity ratios show how well managers are creating value from organizational assets.

Question 16

What allows managers at all levels to become personally involved with their subordinates and allows them to mentor subordinates and develop their management skills?
A)Clan control
B)MBO systems
C)Market control
D)Output control
E)Direct supervision

Accepted Answer

Direct supervision allows managers at all levels to become personally involved with their subordinates and allows them to mentor subordinates and develop their management skills.

Question 17

Which type of financial ratio indicates whether or not the organization is capable of paying off its short-term debts without having to sell any of its inventories?
A)Quick ratio
B)Current ratio
C)Days sales outstanding ratio
D)Inventory turnover ratio
E)Profit ratio

Accepted Answer

The quick ratio shows whether they can pay these claims without selling inventory.

Question 18

___________ guide behavior and specify what an employee should do when they confront a problem that needs a solution.
A)Goals
B)SOPs
C)Rules
D)Rules and SOPs,but not goals
E)Rules,SOPs,and goals

Accepted Answer

Rules and SOPs guide behavior and specify what employees are to do when they confront a problem that needs a solution.

Question 19

As a regional manager,Dwight is given an operating budget of $1 million for the coming year and is evaluated on the basis of the amount of paper the region can sell based on that budget.Dwight's performance will be evaluated on:
A)A revenue budget approach
B)A cash flow budget approach
C)An expense budget approach
D)A profit budget approach
E)A capital budget approach

Accepted Answer

Managers of a division may be given a fixed budget for resources and be evaluated on the amount of goods or services they can produce using those resources (this is a cost or expense budget approach).

Question 20

MBO starts when top managers:
A)Establish lines of communication
B)Develop behavior controls
C)Develop output controls
D)Establish organizational objectives
E)Establish individual performance objectives

Accepted Answer

MBO starts when top managers establish overall organizational objectives,such as specific financial performance goals or targets.

Quiz 11: Organizational Control and Change

A system for evaluating subordinates' behavior by their ability to achieve specific goals is called:

The workers of an organization perform the same activities in the same way over and over again,based on rules that managers have developed.We say that the behavior of these workers has been:

The times-covered ratio,which measures the degree to which managers use debt or equity to finance ongoing operations,is a type of financial ratio known as:

All of the following are problems associated with direct supervision EXCEPT:

The use of direct supervision as a control mechanism:

A division manager is told to "maximize the sales of the division" and is then evaluated on the basis of the net sales generated by the division.This is an example of:

Which types of financial ratios measure how well the managers of the organization are creating value from the organization's assets?

What is the reason why so many managers use financial measures to assess the efficiency and effectiveness of their organizations?

Control by means of a comprehensive system of rules and standard operating procedures (SOPs) that shapes and regulates the behavior of divisions,functions,and individuals is known as:

As the regional manager,Ted's performance is evaluated on the basis of the difference between the sales revenues generated by his region and the cost of making those goods and services.Ted is being evaluated using:

What is the most immediate and potent form of behavior control?

A division manager is evaluated based on his division's revenues less the budgeted cost of his division.This is an example of:

Which type of financial ratio is computed by dividing the organization's current assets by its current liabilities?

In MBO:

Inventory turnover is a type of:

What allows managers at all levels to become personally involved with their subordinates and allows them to mentor subordinates and develop their management skills?

Which type of financial ratio indicates whether or not the organization is capable of paying off its short-term debts without having to sell any of its inventories?

___________ guide behavior and specify what an employee should do when they confront a problem that needs a solution.

As a regional manager,Dwight is given an operating budget of $1 million for the coming year and is evaluated on the basis of the amount of paper the region can sell based on that budget.Dwight's performance will be evaluated on:

MBO starts when top managers: